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BlockFi halts withdrawals cause of FTX crisis, Bahamas regulators freeze FTX’s assets, US lawmaker claims SEC chairman coordinates with FTX.

BlockFi halts withdrawals cause of FTX crisis

Crypto loan firm BlockFi has stopped customers from withdrawing funds on its platform following the collapse of FTX.

On November 11, the company stated in a Twitter thread that the uncertainty at, FTX US, and Alameda Research prevents them from operating normally. As a result, BlockFi has limited its activities until the issues with the FTX crisis are resolved.

The company also warned its customers not to deposit funds into BlockFi wallets and interest accounts for now.

That said, recent developments in FTX US, such as the red flag at the top of the FTX US website warning that trading on FTX may be halted in a few days, have raised questions about how the failure of FTX could affect its US-based operations.

The crypto community did not take kindly to this abrupt announcement from BlockFi, especially after it reassured its customers 12 hours ago that all activities, including withdrawals, were proceeding normally.

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Bahamas regulators freeze FTX’s assets

The Bahamas Securities Commission (SCB) suspended the registration function of FTX Digital Markets (FDM) and FTX on November 10.

SCB said in a statement it was aware of the public disclosures that revealed client assets were misused, mismanaged, and transferred to Alameda Research.

Alameda is a trading company founded by FTX CEO Sam Bankman-Fried. A leaked balance sheet from the company revealed that it largely holds the native token of the FTX exchange, FTT. The rumors that FTX is financing trading with user funds triggered a series of events that eventually brought FTX to the brink of collapse.

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According to the statement, the Supreme Court of the Bahamas appointed a temporary liquidator and stated that FDM, client assets, and escrow assets held by FDM might not be transferred, transferred, or otherwise handled without the written consent of the temporary liquidator.

Headquartered in the Bahamas, FTX Digital Markets is the Bahamas-based subsidiary of FTX US and the US-based corporation. 

SCB stressed that it would work with the appointed interim liquidator to achieve the best possible outcome for the customers and other shareholders of FTX.

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US lawmaker claims SEC chairman coordinates with FTX

Tom Emmer, a recently re-elected representative of Minnesota’s 6th district in the House, has alleged the head of SEC Gary Gensler had been involved in helping FTX CEO Sam Bankman-Fried gain a “regulatory monopoly”.

In a tweet shared on November 10, Emmer criticized Gensler for creating a media fuss amid FTX’s liquidity problems which amplified volatility in the crypto market.

The Republican lawmaker said his team was investigating the SEC chairman’s alleged collaboration with Bankman-Fried and FTX but only cited that some reports were presented to his office as evidence without giving details.

Gensler spoke on CNBC’s Squawk Box shortly before Emmer’s announcement and did not contest the fact that the SBF met with SEC officials on March 29. The SEC chief said the meeting was similar to other ones with the representatives of crypto companies and included him stressing that “non-compliance will not work”. Still, the head of the SEC did not confirm the reports suggesting that FTX US is under investigation.

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